‘We Plan To Launch Interactive Investment Show To Promote Savings Culture in Kenya’

August 9, 2021

Diana Muriuki-Maina, the Chief Executive Officer at the Institute of Certified Investment and Financial Analysts, fields questions on Kenya’s savings and investment culture.

Kenyans have a very poor savings culture. What is ICIFA doing to reach out to young Kenyans to teach them to embrace a savings and investment culture? Are there investment clubs that ICIFA has established that can reach out to the common man, especially on the opportunities in the capital markets? Elizabeth N Karuga, Nyeri

ICIFA’s legal mandate is to regulate the investment and finance profession and to register and licence investment and financial analysts in Kenya. This is aimed at promoting and monitoring compliance with standards, professional competence and ethical practice, and enhancing professionalism in the sector.

ICIFA has held many forums on promoting a savings and investment culture. Some of the forums held include the second annual conference held in March 2019, which was themed “Promoting a high saving and investment culture in Kenya and the region” and a live webinar held last year where we sensitised Kenyans on investment basics and what to consider before investing.

The webinar recording, among other insightful videos on investing including opportunities in the capital markets, can be found on our YouTube channel Institute of Certified Investment and Financial Analysts. We also plan to launch an interactive investment show across all digital platforms very soon, which will spread the saving and investment culture gospel to the public.

The government has embraced public-private partnerships to, among others, boost service delivery. Regarding your organisation, how can your members assist the government on critical matters of governance like foreign debt and prudent use of public funds to spur economic development in Kenya? Dan Murugu, Nakuru 

Part of the planning process of an economic system, which is critical for economic growth, involves investment decisions and financial evaluation of government financing and projects. Optimal investment and finance resource allocation calls for informed decisions and strategies. These evaluations are the expertise of investment and financial professionals, who are members of ICIFA.

Our members have the skill to advise the government on ways to boost the country’s economic development with a focus on increasing both tax and non-tax revenues as well as revenue optimisation; perform tax and non-tax revenue and budget forecasting and performance tracking; analyse tax and non-tax revenue data and create financial models and forecasts to strengthen strategic planning.

ICIFA members can also advise the government on financial planning and project monitoring and evaluation for the public sector by analysing trends of key financial performance indicators such as revenue, expenditures including public debt and margins. They can also conduct financial due diligence and sustainability analysis on projects and provide recommendations.

I have noted that your services are concentrated in major towns, with a focus on big local and foreign corporates. How accessible and relevant are your services, for example, to informal traders, peasant farmers and pastoralists in far-flung areas? Dan Murugu, Nakuru

ICIFA intends to have branches outside Nairobi in order to have a wider reach given that the services of investment and financial professionals are fundamental for all citizens of regardless of their occupation.

Informal traders, peasant farmers and pastoralists are all involved in some form of financial transaction on a daily basis and would all desire to increase or grow their sources of income. ICIFA members with a focus on investment and financial advisory have the expertise to provide investment and financial advice and education to any person.

They have knowledge of legitimate investment products and strategies that require minimal capital to earn a decent return thus contributing to the financial well-being of investors.

What punitive measures, if any, has the institute put in place to deter unregistered members of the public from offering financial/investment advisory services? Malombe Alex, Machakos University

In accordance with Section 20 of the Investment and Financial Analysts Act, 2015, unregistered persons who practice as investment and financial analysts, which includes offering investment/financial advice, are in contravention of the Act and are liable, on conviction, to a fine not exceeding Sh500,000 or to imprisonment for a period not exceeding two years, or both.

There is no doubt that most of us are traumatised by the experiences brought about by the pandemic. Madam, what advice would you give to the young people who still want to invest despite the unrelenting risks therein? Komen Moris, Eldoret

This is indeed an unprecedented time with the uncertainty of the financial markets heightened by the pandemic. However, it is not all doom and gloom in investing. For example, in the stock market, depressed or declining markets are more of an opportunity rather than an impediment for investing – since market prices are low, the price of a stock with good fundamentals is considered to be at a discount and a good opportunity for entry.

There are other investment opportunities in the capital markets with minimal risk profiles and low capital requirements, such as unit trusts licensed by the Capital Markets Authority, which the youth can explore given the uncertain times.

It is also important to conduct due diligence before venturing into any investment, ensuring full understanding beforehand.

I am a high school leaver. I am quite interested in the field of investment and financial analysis. Which courses, both undergraduate and professional, do I need to pursue? Celine Mukami Ireri

The investment and financial analysis field is growing exponentially and brings many new career opportunities. The Certified Investment and Financial Analyst (CIFA) course offered by Kasneb is the professional course to pursue in order to progress in the career and to practise in the field in accordance with the Investment and Financial Analyst Act. The CIFA professional course can be completed after an undergraduate degree with a focus on finance or economics.

Madam, I completed the CIFA exams in 2015. Sometime this year, I made an application to be registered as a member. To date, I have not heard a word from your offices. My number is ISP/2435.

It would be good to indicate the date of application since the Registration Committee sits once every two months to approve applications. The applications must meet the membership registration requirements in order to be presented to the Registration Committee for approval. You can check on our website to ensure that you meet the requirements for the category of membership that you applied for.

How can Kenyan investors seek redress if they are misled by investment professionals? Robert Mucangi Ndwiga, Embu

It is important for Kenyan investors to always ensure that they seek advice from licensed investment professionals since there are individuals who may purport to be investment professionals but are not.

If there any cases of investors being misled by ICIFA members, the institute has in place disciplinary mechanisms to investigate professional misconduct in accordance with Section 26 of the IFA Act. Members who are involved in professional misconduct risk deregistration and payment of fines of up to one million shillings.

In the recent past, many Kenyans have lost their hard-earned money after falling prey to juicy investment promotions promising high returns. Are your members part of these cons that have left many investors poorer? How can the situation be rectified to avoid a repeat of the same? Komen Moris, Eldoret

ICIFA members are required to comply with professional standards and ethical practice in accordance with the ICIFA code of ethics. Investors must be extremely cautious when investing in investment promotions managed by unregistered and unlicensed investment professionals due to the high risk of lack of accountability and integrity in managing investors’ funds.

The public can access the ICIFA member directory on our website www.icifa.co.ke to confirm if persons involved in any investment promotion are members in good standing.

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